Oliver Holtemöller, VI Conclusions in:

Oliver Holtemöller (Ed.)

How Can We Boost Competition in the Services Sector?, page 269 - 270

1. Edition 2017, ISBN print: 978-3-8487-4676-7, ISBN online: 978-3-8452-8902-1,

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Conclusions (Oliver Holtemöller) The contributions to this conference have very relevant and important im‐ plications for both economists and politicians. Economists mostly talk about the effects of deregulation in an oversimplifying way. The simple story economists usually refer to is the following: If there is a lack of com‐ petition, then prices are above marginal costs, and that leads to an ineffi‐ cient allocation of resources. Although this is certainly correct, I think the world is a little more complicated, so we have to make this very simple static theory compatible with real life. There are five obstacles that should be addressed in future research. Obstacle one is related to static efficiency. In a frictionless world, regulation that imposes barriers to competition re‐ duces efficiency and welfare. But in case of market frictions, regulation can make sense. Therefore, we need economic models that cover channels through which regulation can make sense. One channel through which regulation can have positive effects is reducing transaction costs. How‐ ever, the economic models that we have seen today do not include any po‐ tential positive effects of regulation. Obstacle two is related to dynamic efficiency. It could be the case that temporary profits based on incomplete competition may be necessary to make large investments in research and development profitable. It is not clear whether this is important in the services sector. We need theoretical models and empirical research that shed more light on this. Although simple and abstract models are very useful for communica‐ tion within the scientific community, it is dangerous to use models that ap‐ pear too simple in the communication with the general public. Many noneconomists think that economic models are neglecting important aspects of reality and are therefore not convincing for them. More effort of economists is necessary to explain economic reasoning to non-economists. Obstacle three is about distribution. Of course, reasonable structural re‐ forms have positive aggregate effects. However, that does not necessarily mean that income is higher for everybody. In most cases, there will be losers and there will be winners of reforms and this is always difficult when it comes to the implementation of reforms. You have to think about the losers, that is what is behind the Brexit discussion and also behind the discussion about free trade agreements. So even if a particular reform has VI 269 positive aggregate effects, it is difficult to convince people who lose – or think they lose – from the reforms. Obstacle four is that we still do not know enough about the economic effects of regulation. We need more evidence-based policy advice and more data to work with. The empirical evaluation of economic policy with modern methods that allow identifying causal effects needs to become standard. Finally, not only professional economists should be able to understand basic economic reasoning but also non-economists. However, the degree of economic education in Germany is too low. It would probably be easier to explain the positive effects of structural reforms on the allocation and on the distribution if the level of economic education in the population was higher. VI Conclusions (Oliver Holtemöller) 270

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‘How Can We Boost Competition in the Services Sector?’ is a key question in the process of creating a more effi-cient economic environment in Germany. This book contains a collection of conference contributions on service sector reforms from members of academic institutions, ministries, the EU Commission and other organisations. The conference consisted of a keynote on the importance and implementation of structural reforms in Europe and two panels that dealt with the evaluation of past reforms in the services sector and the potential scope and effects of further reforms.

Since the 1990s, productivity growth in Germany and other Member States of the European Union has been significantly lower than in the US. The development of productivity growth in the services sector is estimated to account for two thirds of this widening gap. The European Commission advocated reforms in the services sector in its country-specific recommendations for Germany. At a conference in Berlin in July 2016, experts from various fields presented and discussed studies on service sector reforms.

With contributions by

Oliver Holtemöller, Brigitte Zypries, Joaquim Nunes de Almeida, Dirk Palige, Henrik Enderlein, Stefan Profit, Davud Rostam-Afschar, Paolo Mengano, Oliver Arentz, Erik Canton, Jochen Andritzky


„Wie können wir den Wettbewerb im Dienstleistungssektor stärken?“ Dies ist eine Schlüsselfrage für eine größere Leistungsfähigkeit des ökonomischen Umfelds in Deutschland. Dieses Buch versammelt Konferenzbeiträge von Mitgliedern wissenschaftlicher Einrichtungen, von Ministerien, der EU-Kommission und anderen Organisationen zu Reformen im Dienstleistungssektor. Die Konferenz umfasste einen Eröffnungsvortrag zur Bedeutung und Durchführung von Strukturreformen in Europa und zwei Gesprächsforen zur Bewertung vergangener Reformen im Dienstleistungssektor und zur möglichen Reichweite sowie zu den möglichen Auswirkungen weiterer Reformen.

Die Zunahme der Produktivität ist seit den 1990er Jahren sowohl in Deutschland als auch in anderen Ländern der Europäischen Union deutlich geringer als in den USA. Es wird geschätzt, dass die Entwicklung des Produktivitätszuwachses im Dienstleistungssektor für zwei Drittel dieses zunehmenden Abstandes verantwortlich ist. Die Europäische Kommission spricht sich in ihren länderspezifischen Empfehlungen zu Deutschland für Reformen in diesem Sektor aus. Auf einer Konferenz im Juli 2016 in Berlin stellten Experten aus unterschiedlichen Bereichen Studien zu solchen Reformen vor und diskutierten deren Ergebnisse.

Mit Beiträgen von

Oliver Holtemöller, Brigitte Zypries, Joaquim Nunes de Almeida, Dirk Palige, Henrik Enderlein, Stefan Profit, Davud Rostam-Afschar, Paolo Mengano, Oliver Arentz, Erik Canton, Jochen Andritzky